Buried in Governor Hochul’s emergency order on health-care staffing is a temporary bar against insurance companies challenging claims submitted by hospitals–and an influential hospital association is taking credit.

Hochul signed the order on Monday to address expected staffing shortages in hospitals and nursing homes as a state vaccine mandate for health-care workers took effect, also on Monday.

Most of the 30-day order focused on waiving licensing rules so that professionals from other states and countries, retirees and recent nursing school graduates could fill in for unvaccinated workers who were suspended or fired.

At the same time, Hochul suspended insurers’ ability to question hospital bills before paying them–including pre-authorization of scheduled surgeries and retrospective review of services already provided–in the name of freeing hospitals’ administrative staff for other duties.

Those lower-profile insurance actions were the first thing highlighted in a memo Tuesday to hospital leaders from Kenneth Raske, president of the Greater New York Hospital Association.

“The EO [Executive Order] suspends utilization review and other Insurance Law provisions,” the memo said. “GNYHA strongly advocated for those suspensions and thanks the Governor for her decisive action on them and the EO’s many other provisions.” 

The memo said hospitals must certify to health plans that suspending utilization review is necessary “to increase the availability of staff.” As Raske added, however: “The EO does not require the plans to approve such certifications.”

Utilization review is a constant topic of political battle, in Albany and elsewhere. Health providers resent having insurers second-guess their decisions, while insurers defend the process as necessary to protect their customers from being overcharged or subject to unwarranted procedures. Existing state laws regulate the process and give hospitals and other providers the ability to denied claims.

Hospitals have sought additional restrictions in the past as a way of increasing revenue rather than freeing up staff. During the preparation of this year’s state budget, hospitals pushed unsuccessfully for legislation that would have required insurers to pay certain claims in advance and challenge their necessity after the fact–a policy dubbed “pay and pursue.” The executive order gives them a partial, temporary victory on the same front.

This week’s memo from GNYHA was reminiscent of an episode in the spring of 2020, when the organization successfully lobbied to limit lawsuits against hospitals related to the coronavirus pandemic. After a liability waiver was quietly approved as a last-minute addition to that year’s state budget–with no public notice or debate–Raske said in an April press release that his group had “drafted and aggressively advocated for this legislation.”

Critics saw that as evidence that the organization, a major donor and political ally of former Governor Cuomo, wields excessive influence with the governor and the rest of Albany.

The latest action was justified as necessary to address a staffing crisis, but some hospitals with high vaccination rates lost relatively few workers when the mandate took effect.

Raske has said a surge of last-minute vaccinations eased the staffing crunch. “We’re in a position where I think the mandate can be absorbed by the health care system,” he told Crain’s New York on Tuesday.

Whether the hospitals with ample staffing will use the executive order to avoid insurance oversight remains to be seen.

About the Author

Bill Hammond

As the Empire Center’s senior fellow for health policy, Bill Hammond tracks fast-moving developments in New York’s massive health care industry, with a focus on how decisions made in Albany and Washington affect the well-being of patients, providers, taxpayers and the state’s economy.

Read more by Bill Hammond

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